Zero To One
Peter Thiel  

Summary

Should be required reading for everyone working in the innovation industry, whether as an entrepreneur or investor. Peter gives a great summary of how he understands businesses of the future

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Notes

Successful people find value in unexpected places and they do this by thinking from first principles

Most people think the future of the world will be defined by globalization but the truth is technology matters more

Quest what you think you know about the past

The most continuous thing of all is not to oppose the crowd but think for yourself

Monopolists lie to protect themselves

Non-monopolists lie by saying ‘we’re in a league of our own’

All Rhodes scholars had a great future in their past

Rivalry causes us to over-compromise old opportunities and copy what has worked in the past

The value of a business is the sum of all of the money it will make in the future

Don’t focus on near term growth. Think will this business be around 10 years from now

Monopolies: proprietary tech, network effects, economies of scale and branding

To make a monopoly, your product needs to be 10x better than the closest competitor

For every start-up, start small with a small market

The most successful companies dominate a specific niche and then scale to adjacent markets

To succeed, you must study the endgame before everything else

Since tracked careers worked for boomers, they think it’ll work for you

Finance epitomizes indefinite thinking because it’s the only way to make money where you have no idea how to create wealth

Americans don’t save and companies leave cash on the balance sheet by not investing in the future

Long term planning is undervalued in our indefinite short term world

A business with a good definite plan will always be underrated in a world where people see the future as random

VCs follow a power law: a small handful of companies radically outperform all others

The best investment in a successful fund outperforms the entire rest of the fund combined

Only invest in companies that have the potential to return the value of the entire fund

You should focus relentlessly on something you’re good at doing but before that you must think hard of whether it’ll be valuable in the future

You can’t find secrets without looking for them. Belief in secrets is an effective truth

Secrets about people are under appreciated

You cannot build a great company on a flawed foundation. First get things right

Founders should share a pre-history before they start a company together

Every single member of your board matters. Ideally 3 but no more than 5

A company does better the less it pays it’s CEO

Hire people that actually enjoy working together

When hiring, talk about your mission and the team

On the inside, every individual should be distinguished by her work (defining roles reduces conflict)

The customer lifetime value (CV) must exceed the average amount to acquire a new customer (customer acquisition cost or CAC)

Focus on small present sales at the beginning before expanding

Nail down one mode of distribution for sales (power law applies)

The best companies will use computers and technology to make people better

Big data is usually junk data. You need a human to process it

Best companies will solve for: how can computer help humans solve big problems

7 breakthrough questions for huge companies

• Can you create breakthrough technologies instead of incremental improvements
• Is now the right time to start your particular business
• Are you starting with a big share of a small market
• Do you have the right team
• Do you have a way to not just create but deliver your product
• Will your market position be defensible in 10-20 years
• Have you identified a unique opportunity that others don’t see?

The best problems to work on are the ones nobody is trying to solve